SWOT Analysis for New Proprietors in the Retail Industry

SWOT Analysis for New Proprietors in the Retail Industry

The SWOT analysis is one of the major tools available to business persons who intend to cut out a niche for themselves in a particular industry. This analysis assesses the strengths, weaknesses, opportunities and threats that make a business viable or not. Within the retail industry, there are varied ups and downs that a potential retailer should be aware of before setting up a business in this field.


A retailer must establish his or her strengths in the business before setting up shop. Strengths are the aspects that place the retailer at an advantage as compared to the competitors in the market. This may include:

  • Unique products. If your product stands out you will definitely appeal to more clients. It is thus necessary for retailers to invest in the best raw materials so as to produce high quality products.
  • Better prices. Consumers often want quality products at cheaper prices. If your product has no major difference with what is already in the market, you can get a cheaper supplier and slightly reduce the cost of the product. This places you at an advantage because consumers will be more attracted to the cheaper price.
  • Locations with higher traffic. A location with high traffic is an asset to a retailer because more clients are likely to visit the store. Nevertheless it is necessary to advertise and set up the store in an appealing manner in order to attract clients.
  • Access to better suppliers. Suppliers come in handy when carrying out the retailing business. A proprietor who has reliable and affordable suppliers can make high profits in the business.

It is important that the retailers identify the strengths of their business before getting into the market as this is what they can exploit to make higher profits for themselves.


These are the disadvantages that a retailer might have in the market. Weaknesses may be controllable or uncontrollable. How a retailer addresses the weaknesses in the business can break or make the entire venture. Some of the controllable weaknesses include:

  • Stiff competition. The retailing business might have many competitors. This can prove very challenging because a new entrant into the market must compete effectively in order to create a niche for themselves. This is controllable because as a retailer you can find ways to appeal to more clients and also change with the trends.
  • Inadequate capital. This is a weakness faced by several new entrants into the retail industry. New retailers who carry out research can beat this weakness by finding cheaper suppliers and also exploit other avenues of finding financing for their businesses.
  • Poor location. A strategic location is essential in the retailing industry. Retailers who don’t get the best locations can opt to sell their products to better placed and well known retail stores as they search for better locations.

Uncontrollable weaknesses on the other hand may include:


Opportunities are important in the retail industry as they can help a proprietor grow. These can come in different forms and one must learn to look out for them. Some of the opportunities to take advantage of in the retail industry include:

  • Product gaps
  • Client needs
  • Trends in the market
  • New openings
  • New sources of raw materials
  • Better suppliers
  • Working with established retailers

A proprietor must always be on the lookout for such opportunities as these can help the business grow.


Anything that may place the retail business at a disadvantage is considered a threat. This may range from stiff competition to changes in the industry. A proprietor must be alert to threats and take necessary steps to avert negative impacts from such threats.

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